IFL - Insignia Financial

[notting]

Did you decide to jump today, notting, or are you hanging in there.

A loss of 24% in half as many days is bad.

gg

Nope, I'm only down 5% and I it's entering a support zone.
Watch what it does there.

 

[Garpal Gumnut]

Nope, I'm only down 5% and I it's entering a support zone.
Watch what it does there.

My best wishes for you.

Google "confirmation bias."

You originally went long at $8.94 and said you would get out if it went south. It is now at $8.38.

gg

 

[sptrawler]

Did you decide to jump today, notting, or are you hanging in there.

A chart does not bode well for the gents and ladies at IFL, all good Friends.

It looks as if a recent triangle is trending down with a pick up in volume.

Time to put a helmet on.

A loss of 24% in half as many days is bad.

gg

I became involved when they bought out Aust wealth management, sold them a couple of years ago, and kicked myself ever since.

The bruises are healing well at the moment, just shows, you never know what is around the corner.

 

[Garpal Gumnut]

I became involved when they bought out Aust wealth management, sold them a couple of years ago, and kicked myself ever since.

The bruises are healing well at the moment, just shows, you never know what is around the corner.

So true spt

So true.

I have been out of gambling stocks to my detriment over the last 9 months.

And they are retreating as will the Chinese gamblers.

And IFL is a huge gamble atm. When the constipated get relief as an old company like this does, watch out.

gg

 

[Garpal Gumnut]

It is interesting that there seems to be a pattern to the delinquency of IOOF ( IFL ).

Firstly they have poor internal governance, going back many years.

When IOOF have uncovered insider trading and front running they have elected to deal with it in-house rather than referring it to regulators.

From the SMH.

The investigation by Fairfax Media has uncovered a trove of internal documents and whistleblower testimony that show IOOF has investigated misconduct by its staff on several occasions and in nearly every instance, including incidents of insider trading and suspected front running, dealt with the matter in-house rather than notifying the Australian Securities and Investments Commission.

And then they compound this by electing to price units differently for investors.

From the Financial Review

The Australian Financial Review can also reveal IOOF's cash management trust division is plagued by regulatory breaches and unit pricing errors that have led to some clients receiving distributions that are too high, diluting the distributions to other customers in the division.

A Royal Commission is warranted.

What are CBA, Macquarie and other instos up to?

gg

 

[notting]

My best wishes for you.

Google "confirmation bias."

You originally went long at $8.94 and said you would get out if it went south. It is now at $8.38.

gg

I'll get out but only when it falls through significant support and I didn't buy this one in one chunk hence the 5%, which will not get bigger than 10% if it breaks support and I have to run. Given it cracked the low after the plunge set on the 25th, that would have been a good time to sell. But given the market was so negative today, I thought I'd give it a little more squeezy space.

 

[sptrawler]

The problem I had with IFL, was like most other superannuation styled companies, they seem very opaque.

The only one I'm still exposed to is AMP, mainly because they had their ar$es smacked, when they had to divest the U.K division.

 

[notting]

Now that trade is in the green with it's head above first resistance point.
Take some off, watch to see if it wants to go any higher volumes not that encouraging on it's way up.
Needs to get through 9.20 with attitude to be heading back to where it came down from.

 

[notting]

Got rid of the rest at 9.25 because it ran up on the back of it's results which were largely achieved prior to the scandal. It didn't respond well to the senate hearing in the end and so this quarter will be the one that shows reputation damage in the form of customers putting their money elsewhere.
It is hitting it's head on resistance and needs to get through with volume.
I'm really just taking a belated stop loss which has been profitable.

 

[sptrawler]

Well I've dipped my toe back in at $8.50, the changes to the super rules, will result in a return to mainstream.IMO

 

[So_Cynical]

Well I've dipped my toe back in at $8.50, the changes to the super rules, will result in a return to mainstream.IMO

The fund managers are getting hit, there is a big switch on to ultra low cost index ETF's etc, a lot of money moving out of high cost poorly performing managed funds into low cost index ETF's.

 

[sptrawler]

The fund managers are getting hit, there is a big switch on to ultra low cost index ETF's etc, a lot of money moving out of high cost poorly performing managed funds into low cost index ETF's.

That's a good point, but won't it also lead to a consolidation of smaller funds?
Trying to get a decent dividend these days, is getting harder and harder.

 

[Ves]

That's a good point, but won't it also lead to a consolidation of smaller funds?

Industry consolidation to this point has certainly driven IFL's earnings growth. They've done a good job in integrating their previous acquisitions into their structure so far.

One investment thesis behind a holding in IFL is that they can continue acquiring some of the smaller funds, financial planning businesses etc. and integrating them into their vertically integrated platforms and increasing their scale. The main thing to watch out for is the bigger players stepping over themselves to pay exorbitant prices on the smaller players (ie. bidding wars).

It's an interesting business model I think. I follow IFL a bit, but don't hold at this point. The best time to buy Fund managers (and other market linked businesses) seems to be during periods of big market declines because some investors invariably have a habit of extrapolating poor market returns too far into the future.

 

[Klogg]

It's an interesting business model I think. I follow IFL a bit, but don't hold at this point. The best time to buy Fund managers (and other market linked businesses) seems to be during periods of big market declines because some investors invariably have a habit of extrapolating poor market returns too far into the future.

On this point - have you by any chance taken a look at PTM recently? Given they have a larger focus in Asian markets (where markets have not performed too well), it sort of correlates with what you said (bolded)

It's got my interest so far (enough to keep a watch on it at least).

 

[Ves]

On this point - have you by any chance taken a look at PTM recently? Given they have a larger focus in Asian markets (where markets have not performed too well), it sort of correlates with what you said (bolded)

It's got my interest so far (enough to keep a watch on it at least).

I haven't looked at PTM closely for a while, I actually meant to but inadvertently forgot.

I did see that they announced a buy-back, which to me looks like Kerr Neilson is sending a message to the shorters. He's obviously got a pretty good record, which makes me think it deserves some attention in itself.

 

[McLovin]

I haven't looked at PTM closely for a while, I actually meant to but inadvertently forgot.

I did see that they announced a buy-back, which to me looks like Kerr Neilson is sending a message to the shorters. He's obviously got a pretty good record, which makes me think it deserves some attention in itself.

There's two parts to a FM business. Performance and distribution. PTM has the performance (although they've had a bit of flat spot lately) but they've never really invested in the distribution. They never paid advisor commissions, back when that was a thing and they've tended to go easy on the ad spend and their sales team is tiny (think of how many fund managers underperform consistently but manage to grow FUM...they're really marketing businesses). When they're posting industry leading returns cash will flow just because its chasing the highest returns. But in a period of sub-par returns the lack of a properly developed distribution/marketing arm can really exacerbate outflows.

 

[Ves]

There's two parts to a FM business. Performance and distribution. PTM has the performance (although they've had a bit of flat spot lately) but they've never really invested in the distribution. They never paid advisor commissions, back when that was a thing and they've tended to go easy on the ad spend and their sales team is tiny (think of how many fund managers underperform consistently but manage to grow FUM...they're really marketing businesses). When they're posting industry leading returns cash will flow just because its chasing the highest returns. But in a period of sub-par returns the lack of a properly developed distribution/marketing arm can really exacerbate outflows.

Thanks. Really good points.

The key person risk re Kerr Neilson is also interesting. I see him as the heart and soul of the company, and they're also inseparable. In effect, they probably haven't needed to do much advertising because his reputation in the investment community precedes itself. It's hard to know how big his influence still is and what happens when he's no longer there.

As a really crude value determinant a P/E of 15 and dividend somewhere above 6% (currently) probably isn't going to blow the lights out going forward IMO. Might still beat the market. But I'd still like heaps more blood on the streets (aka GFC or 2010/2011 kind of thing).

 

[Klogg]

There's two parts to a FM business. Performance and distribution. PTM has the performance (although they've had a bit of flat spot lately) but they've never really invested in the distribution. They never paid advisor commissions, back when that was a thing and they've tended to go easy on the ad spend and their sales team is tiny (think of how many fund managers underperform consistently but manage to grow FUM...they're really marketing businesses). When they're posting industry leading returns cash will flow just because its chasing the highest returns. But in a period of sub-par returns the lack of a properly developed distribution/marketing arm can really exacerbate outflows.

This is exactly why I am looking at it. Without the distribution component, they're really dependent on returning more than the relevant indices.
The reversal of the current FUM flow is likely once out-performance occurs.

(I'm failing to figure out when this may occur... I'd have to understand their holdings in the relevant funds to do so I guess.)

As a really crude value determinant a P/E of 15 and dividend somewhere above 6% (currently) probably isn't going to blow the lights out going forward IMO. Might still beat the market. But I'd still like heaps more blood on the streets (aka GFC or 2010/2011 kind of thing).

FWIW - there's almost $300m of cash and term deposits there with no significant debt, so might be worth adjusting accordingly.

 

[Ves]

FWIW - there's almost $300m of cash and term deposits there with no significant debt, so might be worth adjusting accordingly.

Agree.

 

[kermit345]

I'm employed within one of IFL's subsidiaries and I have to say their product offering is pretty good in terms of being easy to administer, cost-effective and good investment choice. A lot of the portfolios we put together for clients are index based these days simply because out of the 500+ active funds available there are a very small handful that actually outperform the index after fees - particularly on australian shares as our market is just so small that anyone who outperforms for a year or two eventually has too much FUM inflow that they just become market centric anyway.

Put it this way, IFL's fees are very well positioned and even compete with the industry funds in terms of super administration. That alone plus their investment funds and the natural progression of super (being required to contribute 9.5% per annum) should see a natural increase in their share price over time. That combined with the healthy dividend makes me think their a pretty good long-term proposition.